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British Prime Minister Theresa May attends the first day of the Conservative Party conference in Birmingham, at a time when the country faces important questions about its future outside the European Union. Photo: AFP

In Little England, the conceit of Brexit is on full display

Philip Bowring says three months after Britain voted to leave the EU, the arrogance with which the UK political class is handling the break-up is anything but reassuring

Brexit

Chinese tourists may be enjoying London in the wake of the fall in sterling but for this visiting Brit, it is a depressing place. Brexit is built on a fearsome alliance of arrogance, ignorance and nostalgia. If pursued with the intensity indicated by Prime Minister Theresa May, a poor woman’s Margaret Thatcher, the decline of the nation relative to its European peers is destined to accelerate.

Much of the blame for this state of affairs rests with a professional political class focused more on party politics than on national interest or principles of government. Thus, then prime minister David Cameron promised a referendum on the European Union simply to buy off the xenophobic wing of his party, as there was no popular demand for it. In the process, he undermined centuries of representative government through Parliament, unleashing a protest vote backed by battalions of lies from the ranks of opportunists led by Boris Johnson, a precursor of Donald Trump.

Books about Boris Johnson, now Britain’s foreign secretary, are displayed for sale at a gift shop inside the International Convention Centre in Birmingham, where the Conservative Party held its annual conference. Photo: AFP
Leaflets featuring Labour Party leader Jeremy Corbyn are displayed on a table after an event on the sidelines of the party’s annual conference in Liverpool, held last month. Photo: Bloomberg

Theresa May flags ‘hard Brexit’ but business groups and eurosceptics demand more detail

As for the opposition Labour Party, its election of a 1960s neo-Marxist as leader despite its official pro-EU stance has condemned it to irrelevance. Its detachment from reality was indicated by its recent party conference, where Brexit, the most important issue the nation has faced in 50 years, went largely ignored amid talk on social and leadership issues.

The nostalgia for a non-existent past is particularly strong among older generations. That should be surprising to anyone who remembers what Britain was actually like in its pre-European Economic Community/EU days, or its arrogant failure to join the European movement in the beginning and then its humiliating rejection by France’s president Charles de Gaulle in 1963.

The scorn with which Brexit advocates treat other EU members is in stunning contrast to the actual facts about relative conditions. The economics is disturbing. The UK is now running a current account deficit equal to 6 per cent of its gross domestic product. That is the highest of any major country and would be cause for panic in a developing country. It is sustained by a mix of the sale of domestic assets and bonds to foreigners (the latest its £24 billion [HK$232 billion] sale of chip company ARM to Japan), and flow of Chinese and other funk money into property and football teams. Not long ago, the UK had large net overseas assets. Now, debt and dividend service adds to the deficit.

Commuters walk past the Bank of England in the City of London. Britain’s surplus-generating financial and insurance services sector is at risk from Brexit. Photo: Bloomberg

A way to ease the pain of Brexit for all parties

Two of the sectors which help offset a gigantic deficit in goods trade are especially at risk from Brexit. The biggest is financial and insurance services, generated by London, which shows a huge surplus. The other is cars, now the largest export item thanks to Japanese and others who set up plants which mostly export within the EU.

Productivity has been static since 2007 so economic growth has been based on longer hours and importing labour, mostly for low-paid jobs. Income distribution is among the worst in the OECD and housing standards below north European standards. On a purchasing power basis, the economy is worse than its GDP suggests. It is hard to imagine that even without Brexit, these issues can be addressed without a big fall in consumption and a rise in investment.

Whatever some advocates claim, the political reality is that Brexit is protectionist, as May’s populist attacks on big business show

Many Brexiteers hide their racism behind claims that migrants are crowding out Brits for health treatment. Yet foreign doctors and nurses underpin the health service. They account for 42 per cent of specialists. The problems of the health service are mainly because the UK spends far less on health than other north European countries.

May herself has a record of small-mindedness from her years as home secretary. It is summed up by a grotesque test which foreigners have to take to get UK citizenship. This supposedly well-educated native Brit found he could answer fewer than half the questions. Rote-learning of a booklet is now the route to citizenship.

The Brexiteers promise that the UK will be more globally focused after leaving the EU. Yet, at the same time, it threatens to clamp down on all migrants, skilled or not, EU or not. The idea that it can compensate for trade losses by free trade deals with fast-growing developing countries such as China is laughable. It already has a US$40 billion a year deficit with China in goods trade and accounts for less than 1 per cent of Indonesian imports. Unless the EU turns protectionist, there is scant reason why China, the US or anyone should find it desirable to have a special relationship with the UK. Whatever some advocates claim, the political reality is that Brexit is protectionist, as May’s populist attacks on big business show.

Containers are loaded at a port in Qingdao, Shandong. Unless the EU turns protectionist, there is scant reason why China, the US or anyone should find it desirable to have a special relationship with the UK. Photo: China Daily via Reuters

Once out of the EU, Britain must again find its place in the world

The illusions of “regaining sovereignty” go deep. An encounter with two recently retired judges revealed a shocking ignorance of the world outside their own self-important English domain. It was a reminder of the satirical Gilbert and Sullivan lines: “The law is the true embodiment / Of everything that’s excellent / It has no kind of fault or flaw / And I, My Lords, embody the law”. European laws were by definition inferior.

The only hope for the Brexiteers is that the likes of Marine le Pen in France and equivalents in Germany, Italy and Spain lead to the foundering of the EU on the rocks of the xenophobia they have helped generate. Otherwise they will be found out, having sold a concept which can only further demean and impoverish the UK (or maybe just Little England).

Philip Bowring is a Hong Kong-based journalist and commentator

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